Editorial : DON’T SPOIL A GOOD IDEA WITH MONOPOLY

The RBI’s High-Level Task Force on creating a Public Credit
Registry (PCR) for India has recommended an in-house repository(भंडार गृह/कोष) having extensive(विस्तृत/व्यापक) information
on allborrowers(उधारकर्ताओं). The intent(आशय/प्रयोजन), to curb bad loans
and make the credit market more efficient(कुशल/योग्य), is laudable (प्रशंसनीय/सराहने योग्य) comprehensive
database will help lenders(कर्ज देनेवाला) get
a true picture of a borrowers’ credit

history and enable them to assess risks
better. To have data—such as external commercial borrowings, market borrowings
and all contingent(आकस्मिक/श्रेणी) liabilities—makes
sense for a holistic picture. However, why make the PCR the “single point of
mandatory reporting for all material events for each loan, serving as a
registry of all credit contracts verified by reporting institutions” for all
lending in India? Indeed, all information should come to it, but not just to
it. Competition is a good idea.

Today, multiple repositories, including Credit Information
Companies (CIC), collect and store granular credit information. The panel says
that credit institutions will not be obliged to provide information to CICs.
That is not a good idea. The notion that a single window for reporting credit
information will lower the compliance burden (बोझ) is
flawed in a technology-driven era. PCR should co-exist with other repositories
that include information utilities that authenticate(प्रमाणित) and
store sensitive information on debt and default to speed up the resolution(संकल्प/प्रस्ताव) process. More
competition will drive innovation(नवीनता)/नवीनीकरण) and
improve the quality of data on borrowers.

Borrowers must be allowed to access their own credit history.
Multiple identifiers are unnecessary. Aadhaar is a unique ID for individuals(व्यक्तियों). Other legal
entities must be mandated (अनिवार्य/अधिकार-पत्र
दिया जाया)to have unique identifiers, to trace real beneficial(फायदेमंद) ownership.
Data privacy and security must receive due attention.